Buyout talks between Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Takeda Pharmaceutical that would have resulted in the sale of Salix Pharmaceuticals, which Valeant owns, have broken down. The negotiations could be revived, but Valeant doesn’t seem keen on resuming talks to sell its Salix business as it has already begun talking about strengthening the business on its own.

What caused the disagreement?

It turns out that Valeant and Takeda disagreed on the valuation of Salix. The sale of Salix could have fetched about $10 billion for Valeant. It appears Takeda wanted to reduce the price but Valeant refused, leading to the collapse of the talks.

For Takeda, the breakdown of the negotiations marks another setback for the company in its attempt to bring Salix under its wing. Takeda last year lost a bidding war for Salix to Valeant. After that Takeda tried to acquire the whole of Valeant but that bid hit a snag.

Takeda seems to have pressed for a lower valuation of Salix considering that the business has underperformed in recent times.

Missed opportunity to raise funds for debt repayment

While Takeda has missed an opportunity to add a key asset to its portfolio, the breakdown of the talks also mean Valeant has missed an opportunity to raise cash to pay down its debt. Valeant took on massive debt to finance acquisitions that failed to pay off as expected and left it in a financial hole. The company has debt of about $30 billion, with about $12 billion owned to banks.

Besides debt, Valeant is facing a slew of probes, some of which touch on possible corrupt practices that could lead to costly settlements.

Building Salix single-handedly

After talks with Takeda collapsed, Valeant announced plans to expand Xifaxan sales force as part of the efforts to strengthen Salix business.

“Xifaxan and Relistor are integral to our gastrointestinal franchise which remains a core asset for future growth potential in the hands of Valeant,” said CEO Joseph Papa.

The collapse of the negotiations to sell Salix also doesn’t mean everything is lost for Valeant. The company has several assets it can monetize and raise funds to repay its debt. For instance, the company could sell its surgical equipment unit that could fetch something in the vicinity of $2.5 billion.

Shares of Valeant have suffered as the company struggles with heavy debt. The stock is down more than 84% so far in 2016.